CHAPTER IV CAPITAL STRUCTURE OF STEEL INDUSTRIES IN TAMILNADU

Transcription

1 CHAPTER IV CAPITAL STRUCTURE OF STEEL INDUSTRIES IN TAMILNADU INTRODUCTION In order to run and manage a company, funds are needed. Right from the promotional stage up to end, finances plays an important role in steel industries life. If funds are inadequate, the business suffers and if the funds are not properly managed, the entire organization suffers. It is, therefore, necessary that correct estimate of the current and future need of capital be made to have an optimum capital structure which shall help the organization to run its work smoothly and without any stress. Estimation of capital requirements is necessary, but the formation of a capital structure is important. According to Maheswari.S.N., Capital structure of a company refers to the composition or make-up of its capitalization and it includes all long-term capital resources viz: loans, reserves, shares and bonds 1. Capital structure, sometimes known as financial plan, refers to the components of long term sources of funds, such as debentures, long-term debt, preference share capital and equity share capital including reserves and surpluses. In the other words of Lawrence D. Schall and Charless W. Haley, the term capital structure means the proportion of different types of securities issued by a firm. The optimal capital structure is the set of proportion that maximizes the total value of the firm 2. Capital structure is that part of the financial structure which represents long term funds. It is the permanent financing of the firm, represented primarily 88

2 by long term debt, preference stock and common stock including reserves and surpluses, but excluding all short term credits. In an industrial undertaking capital structure as decisive impact on it s composition. The capital structure should be so designed as to achieve the desired managerial goals. According to S.C. Kuchal, within this framework of equating the rate of return and the cost of capital, capital structure is sought by using a proportion of debt such that the correct degree of trading on equity leading to financial leverage will cause the highest market value of the ordinary shares 3. Capital structure, therefore involves a choice between size and expected returns. Capital structure ordinarily implies the proportion of debt and equity in the total capital of a company. Since a company may tap one or one of the different sources of funds to meet its total financial requirement. The total capital of a company may, thus, be composed of all such tapped sources. The term structure has been associated with the term capital. The term capital may be defined as the long term funds of the firm. In other words, the capital may also be expressed as follows. Capital = Total Assets Current Liabilities The capital structure of a business enterprise consists of debt and equity shares which provide funds for a firm. Capital structure is composed of a firm s finance of its assets. It is the permanent financing of a firm represented by long term debt plus preferred stock plus net worth 4. Apart from short term finance from creditors and banks, companies are usually financed either by long term loans (debentures) carrying a fixed rate of interest on capital or by ordinary 89

3 shares carrying membership of a company and dividends at the rate which depend upon profits 5. The basic pattern of capital structure can be simple or complex. A simple capital structure consists of equity shares and preference shares. But a complex capital structure consists of multi securities such as equity shares, preference shares, debentures, bonds, etc., GOALS OF EFFICIENT CAPTIAL STRUCTURE MANAGEMENT An efficient capital structure management is aimed determining a proper mix of debt and equity securities that maximizes the value of the common stock on a per share basis, taking advantage of favourable financial leverage, taking advantage of leverage offered by corporate taxes and, avoiding a perceived high risk structure. SOURCES OF CAPITAL There are two categories through which a firm can raise its capital 1. External Sources and 2. Internal Sources. External Sources: Every undertaking in the initial stage must obtain permanent funds in the form of share capital from its shareholders. An undertaking may raise its capital through issuing equity shares, preference shares and debentures. Which of these three is a better source depends upon the earning capacity of the undertaking. If earning is uncertain, issue of debentures is not preferable, because they involve fixed commitment of paying prescribed rate of interest on 90

4 them. In such cases, it is desirable to go for issue of equity shares. Noncumulative permanent funds to the undertaking without fixed commitment. Long term loans are raised from lending Industrial Financial Institutions like Industrial Finance Corporation of India, Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, this method of raising funds is becoming more popular than the issue of creditorship securities (debentures). In addition to long term lending institutions even the commercial banks provide term loans ranging up to five to seven years. Internal Sources: The internal sources of funds include earned surplus and depreciation provision, Depreciation is a non-cash expense, the cash goes out only when the assets were acquired. When combined with the cash costs of operation such as materials, labour, heat, light and administration, this non- cash charge determines the total cost of producing the goods. When merchandise is sold, the difference between the selling price and the total costs represents the net inflow of cash in to expertise. The amount of net cash flow will exceed the profit by the amount of depreciation charge. It is the sense that depreciation is some times referred as a source of funds 6. Capital structure is made up of debt and equity securities which comprise a firm s finance of its assets. It is the permanent financing of a firm represented by long term debt, plus preferred stock, and plus net worth. The determination of the degree of liquidity of a firm is not simple task. 91

5 THE OPTIMUM CAPTIAL STRUCTURE The capital structure differs according to different types of industries. There is no such thing as the model capital structure for all business undertakings. One way of planning the capital structure is to make it fit into a model compiled from a number of different experiences that might have been drawn from the historical ratios of the firm 7. The optimum capital structure is the mix of finance in which the market value of each share is maximum or the average cost of capital is minimum. An optimum capital structure would be obtained at that combination of debt and equity that maximizes the total value of the firm (value of the share plus value of debts) or minimizes the weighted average cost of capital 8. Up to certain point, debt added to the capital structure will cause the market value of the firm to raise and the cost of capital to decline. However after the optimum point has reached any additional debt will cause the market value to decrease and the cost of capital to increase 9. Optimal capital structure can be properly defined as that combination of debt and equity that attains the stated managerial goals, maximization of the firms market value, and which minimizes the firm s cost of capital. As the existence of an optimum capital structure implies the simultaneous optimization of both the cost of capital and the firm s market value, it occupies a central position in the theory of Financial Management 10. The normative objective of the firm maximizing shareholders wealth is to reduce the cost capital to a minimum by continuing to raise long term funds over time in the least expensive ways 11 92

6 The Capital structure decision of a firm is concerned with the determination of debt equity composition. Proper planning of the composition is necessary for sound financial management since the debt- equity mix of financial leverage has implications for the shareholder s earnings and risk, which is turn, will affect the cost of capital and the market value of the firm. Various theories of capital structure have been propounded in explaining the relationship between market value of the firm and its capital structure decision. In practice, planning an optimum capital structure is the most difficult task as the decision is influenced by myriads of factors, which are highly psychological, conflicting, complex and qualitative, thus adding to the woes of financing executive. All companies should have well- defined capital structure policy, otherwise it may face problem of raising fund and financing the projects in the long- term funds. An appropriate capital structure decision may improve the value as well as solvency position of the company. There would be two opposite effects its debts exist in the capital structure. Overall cost of capital may be reduced as proportion of debt increases in the capital structure due to low cost of debt. On the other hand, because of fixed contractual obligation, the financial risk of the company increases, which again increased the weighted average cost of capital. It is said theoretically that optimum capital structure implies a ratio of debt and equity at which weighted average cost of capital would be the least and the market value of the share of the firm would be the highest. A sound or appropriate capital structure should have the following features, viz., profitability, solvency, flexibility, conservation and control. These 93

7 features will differ from company to company. So the management of financing decision should be made with view to achieve the target capital structure. Wherever the fund have to be procured additionally, the Finance Manager weighs production and consumption of various sources of finance and selects the most advantageous sources keeping in view the target capital structure. The capital structure decision is a continuous one and has to be taken up whenever a firm needs additional finance. Capital structure, the mix of long term debts and equity securities, is generally used to finance long term assets of companies. It consists of permanent short-term debt, preferred stock, and common equity. The financial structure is sometimes used as synonymous with capital structure. However, financial structure is more comprehensive than that of capital structure in the sense that the former refers to aggregate amount of total current liabilities, longterm debt, preferred stock, and common equity i.e., total of liability side of the balance sheet (source of funds). Therefore, capital structure is only a part of financial structure and refers mainly to the permanent sources of the firm s obligations for a well designed capital structure policies to lessen the hurdles of raising finance for its project. An appropriate capital structure decision improves bottom line as well as solvency position and rescued the firm from its impending threat of bankruptcy. On the other hand, it brings synergy effect pertaining to boasting shareholders value with mixing debt and equity. The overall cost of capital is reduced with increase in significant proportion of debt in the capital structure because of fixed 94

8 contractual obligations. At the same time financial risk of the firm is argumented in the event of firm s inability to leverage its operation. Here lies the essence of optimum capital structure concept in firm s financing decision relating to determining an appropriate ratio of debt and equity at which Weighted Average Cost of Capital (WACC) would be the least and the market value of the firm would be the highest. Generally in the firms growth trajectory it is difficult to find an optimum capital structure as it is influenced by host of factors. FACTORS DETERMINING CAPITAL STRUCTURE Capital structure of different types of firms varies widely. There is no rigid formula to explain the temperaments. There are no hard and fast rules about what percentage of capitalization should be represented by bonds and debentures and what part should be equity shares and preference shares. Factors affecting capital structure revolve principally around the adequacy and the stability of earnings. It is always better that the capital structure should be balanced with a sufficient equity cushion to absorb the shocks of the business cycle and to offer flexibility. The factors that affect the capital structure of a firm are; Cost of Capital Market Conditions Internal Conditions Growth Rate Stability of Sales Flotation Cost 95

9 Nature of Industry and Capital Requirements Flexibility Profitability Taxes Interest Rate Level Control Leverage Effect 4:1 DEBT EQUITY RATIO The relationship between borrowed funds and owner s capital is a popular measure of the long-term financial solvency of a firm. This relationship is shown by the debt-equity ratio. This ratio reflects the relative claims of creditors and shareholders against the assets of the firm. The debt equity ratio is computed by dividing long-term or total debts by the shareholder s fund 12. The total debt consists of fixed deposits and long-term loan from shareholders, directors, public and commercial banks and financial institutions. Whereas shareholder s fund comprises of ordinary share capital, preference share capital and reserves and surpluses. Change in the debt equity ratio may occur due to fluctuation in quantities of value of any of the two variables viz., total debts or long-term debts and shareholder s funds. Debt- Equity Ratio of the sample units of the steel industries in Tamil Nadu have been shown in Table 4.1. Debt Equity Ratio = Total debt Shareholder s Fund 96

10 TABLE 4.1 DEBT EQUITY RATIO (Ratio in Times) YEAR AML BSIL KSIL SIL TNECL MEAN S.D C.V (in %) Source: Computed from the Annual Reports. AML Limited It could be observed from the table 4.1 that the debt equity ratio for AML is varied between the highest value of 0.86 during and the lowest value of 0.11 during The mean value of the debt equity ratio is It shows that the utilization of debt capital is less, and higher usage of equity and reserve 97

11 and surplus. But the co-efficient of variation is high (63.15), it shows more variability in debt equity ratio. BSIL It is observed from above table that the debt equity ratio of BSIL is varied between the highest value of 5.49 during and lowest value of 3.30 in the year The mean value of debt equity ratio is It indicates that utilization of debt capital is higher and lower usage of own capital. The coefficient of variation is less (17.42) it shows consistency in usage of debt capital. KSIL The table 4.1 shows that mean value of the debt equity ratio is 0.45 and of Co-efficient variation is percent. In the year the company shows higher value of debt-equity ratio of 0.73 and lower ratio is 0.25 in the year It implies the shareholders equity should be higher than the outsider s funds. The co-efficient of variation is which show consistency of debt equity ratio. SIL It could be observed from the table 4.1 that the mean value of the debtequity ratio is 2.61 and the co-efficient variation is percent. In the year , the ratio shows the highest value of 4.36, and the lowest value of 1.32 during the This ratio shows that it is more than the ideal ratio of 1: 1. It is inferred that loan capital utilization is higher than the owner s capital. The co- 98

12 efficient of variation is high (34.48), which shows more variability in debt equity ratio. TNECL The mean value of the debt equity ratio of TNECL is 3.20 and co-efficient of variation is percent. In the year , the ratio shows the highest value of 3.85, and the lowest value of 1.69 during the year The mean value indicates that the higher usage of loan fund than the own funds. The degree of co-efficient variation indicates inconsistency during the study period. It is concluded from the table 4.1 that the consistency is found from the BSIL and lower utilization of loan funds by AML among the five industries. 4.2 Interest Coverage Ratio This ratio is very important from the lender s point of view. It indicates whether the business would earn sufficient profits to pay periodically the interest charge. It indicates the number of times interest is covered by the profits available to pay the interest charges. But, a too high interest coverage ratio may not be good for the firm because it may imply that firm does not use debt as source of finance so as to increase the earning per share. Table 4.2 exhibits the interest coverage ratio of the select steel industries. It is computed as follows. Interest Coverage Ratio = Net Profit and Before Interest and Tax Fixed Interest Charges 99

13 TABLE 4.2 INTEREST COVERAGE RATIO (Ratio in Times) YEAR AML BSIL KSIL SIL TNECL MEAN S.D C.V (in %) Source: Computed from the Annual Reports. AML The company exhibits the mean value of the interest coverage ratio is 5.05 and co-efficient variation is percent. In the year the company accounts too low coverage ratio of 1.09 times which is a clear indication of payment in large amount of interest towards borrowed funds. In the year , the coverage ratio shows much higher that is 12.7 times, which shows the 100

14 long term creditors are very safe. The co-efficient of variation is high which shows more variability in interest coverage ratio during the study period. BSIL The mean value of the Interest Coverage ratio is 1.05 and co-efficient of variation is percent. In the year , it indicates higher interest coverage ratio that is 1.42 times which indicates the more safe of the long term creditors so as to increase the earnings per share and in the year it shows the lowest value of KSIL It is observed that the interest coverage ratio is varied between the highest value of 6.97 during and lowest value of 1.21 in the year The co-efficient of variation is the highest (56.70) which shows more variability in interest coverage ratio. The firm is not using much loan capital. SIL The mean value of the Interest Coverage Ratio is 2.16 and co-efficient of variation is percent. From the year , to it shows higher ratio than mean value, this reveals the high earning and low usage of borrowed funds. Since the amount of borrowed funds usage is the lowest the commitment of interest payment is very low. The co-efficient of variation shows more variability in the interest coverage ratio. 101

15 TNECL The mean value of the interest coverage ratio is 1.65 and co-efficient of variation is percent. During the period and the ratio shows high value than the mean value, this indicates the high earning in the periods. The degree of co-efficient of variation indicates more consistency in the interest coverage ratio. To sum up, the interest coverage ratio indicates the number of times interest is covered by the profits available to pay the interest charges. In the case of AML, its net earnings are high among the five industries. It is concluded that the high consistency is found from TNECL among the five industries. 102

16 4.3 PROPRIETORY RATIO A variant to the equity ratio is the proprietary ratio, which is also known as equity ratio or net worth to total assets ratio. This ratio establishes relationship between the proprietors or shareholder s fund and the total tangible assets. It focuses the general financial strength of the business enterprises. A high proprietary ratio will indicate a relatively little danger to the creditors. Low proprietary ratio indicates greater risk to the creditors. Hence the ratio should be 1:2 Assets include both the fixed assets and current assets, and shareholder s funds include equity capital, reserves and surpluses. Table 4.3 shows the proprietary ratio of the select Steel Industries in Tamil Nadu for the study period. It is calculated as follows. Proprietary Ratio = Shareholders Funds Total Assets 103

17 TABLE 4.3 PROPRIETORY RATIO (Ratio in Times) YEAR AML BSIL KSIL SIL TNECL MEAN S.D C.V (in %) Source: Computed from the Annual Reports. AML It could be observed from the table 4.3 the Proprietary ratio is varied between the highest value of 0.84 during and lowest value of 0.47 in the year The co-efficient of variation is 15.06, which shows good position of the long term solvency of the firm and indicates greater risk to the company 104

18 creditors. The degree of co-efficient of variation indicates less consistency in its value during the study period. BSIL In the case of BSIL, the mean value of the ratio is 0.16 and co-efficient of variation is 9.88 percent. In the period from , , to greater than the mean value, it indicates the good financial strength of the firm. In the year the ratio is 0.14 which indicates more risk to the creditors of the company. KSIL In this company, the mean value of the ratio is 0.11 and co-efficient of variation is percent. The company attained higher ratio in the period , which indicates the long term solvency is very good. The degree of coefficient of variation shows fluctuation of proprietors fund and extent of utilisation of the total assets. SIL The mean value of the ratio is 0.57 and co-efficient of variation is percent. From the year and to , the proprietary ratio value is lower than the mean value which indicates the risk of the creditors. The co-efficient of variation is the highest which shows more variability in the proprietary ratio. 105

19 TNECL The mean value of the ratio is 0.66 and co-efficient of variation is percent. From the years, to and , show the high proprietary ratio against the mean value. In this period the risk of the creditors has reduced and they were on the safer side. This shows favourable sign to the organization. The ratio is very low in the year which indicates that the long term solvency is not stable. It is conclude that, the proprietory ratio shows effective utilisation of share capital of select steel industries. Among five steel industries, AML mean value is higher than that of other industries, which leads to good financial position. 106

20 4.4 CAPITAL EMPLOYED TURNOVER RATIO The term capital employed refers to long- term fund supplied by the creditors and owners of the firm. Generally the non-current assets should be financed from the long-term sources. Capital employed turnover ratio of the select steel industries are shown in the Table 4.4. To examine the effectiveness in utilizing such long-term funds for generating sales, capital employed turnover ratio is calculated as follows. Capital Employed Turnover Ratio = Sales Capital Employed 107

21 TABLE 4.4 CAPITAL EMPLOYED TURNOVER RATIO (Ratio in Times) YEAR AML BSIL KSIL SIL TNECL MEAN S.D C.V (in %) Source: Computed from the Annual Reports. AML The mean value of the capital employed turnover ratio is 2.10 and coefficient of variation is percent. The capital employed turnover ratio is varied between the highest value of 4.62 in the year and the lowest of 0.67during the year The mean value indicates that no consistency in 108

22 the capital employed turnover ratio. The co-efficient of variation is the highest, it shows more variability in the capital employed turnover ratio. BSIL In the case of BSIL, the mean value of the ratio is 3.54 and the co-efficient of variation is per cent. The ratio is varied between the highest of 4.97 in the year and the lowest value of 1.98 in the year The ratio shows the effective use of captial employed. KSIL The above table shows that, the mean value of ratio is 3.32., and the coefficient of variation is The capital employed turnover ratio is varied between the highest ratios of 4.32 in the year and the lowest of 2.54 in the year The mean value discloses that the turnover to capital employed ratio is consistent. The co- efficient of variation of KSIL does not show more variability. SIL The mean value of the ratio is 1.88 and co-efficient of variation is percent. During the study period the ratio of the company is 0.88 in which is low and in the year , the ratio is 3.15 which is higher than the other periods that indicate the effective turnover and proper use of capital 109

23 employed. The co-efficient of variation of SIL is the highest which shows more variability in turnover to capital employed ratio. TNECL The mean value of the ratio is The capital employed turnover ratio is varied between the highest value of 3.16 in and the lowest value of 2.40 in The co-efficient of variation is Which is the least in TNECL, which shows more consistency in capital employed turnover ratio. It is concluded that the consistency in capital employed turnover ratio is found from TNECL among the five industries. 110

24 4.5 CAPITAL GEARING RATIO This ratio is also known as capitalization or leverage ratio. It is also one of the long-term solvency ratios. It is used to analyse the capital structure of the company. The ratio establishes relationship between fixed interest and dividend bearing funds and equity shareholders funds. Capital gearing ratio shows the proportion of various items of long-term finance employed in the business. Its main emphasis is on indication of the proportion between owner s funds and non owner s funds. This proportion is called leverage. If the ratio is high, the capital gearing is said to be high and if the ratio is low the capital gearing is said to be low. The implication is that high gearing is trading on thin equity and low gearing is on thick equity. The table 4.5 shows the capital gearing ratio. Capital Gearing Ratio = Long-term loans + Debentures + Preference share capital Equity shareholders Fund 111

25 TABLE 4.5 CAPITAL GEARING RATIO (Ratio in Times) YEAR AML BSIL KSIL SIL TNECL Mean SD CV (in %) Source: Computed from the Annual reports. 4.5 AML It could be observed from the table 4.5 that, the mean value of the capital gearing ratio is 2.61 and co-efficient of variation is percent. By observing mean value, in the year the ratio shows high gearing that implies trading on thin equity and in the year , the ratio shows low gearing that implies trading on thick equity. The highly geared capital structure is indication of under capitalization with high return. A low gearing indicates over capitalization with low 112

26 return. The co-efficient of variation is the highest and shows more variability in capital gearing ratio. BSIL The mean value of the capital gearing ratio is 4.15 and co-efficient variation is percent. It is observed from mean value in the year the ratio shows high gearing which implies trading on thin equity and in the year , the ratio shows low gearing that implies trading on thick equity. The highly geared capital structure is the indication of under capitalization with high return and lower gearing indicates over capitalization with low return. The coefficient of variation shows less variability in the capital gearing ratio. KSIL The mean value of the capital gearing ratio is 3.97 and co-efficient of variation is percent. It is observed that capital gearing ratio is higher (4.90), in the year and lowest value of 2.91 during and that indicates trading on thin equity. A low gearing ratio indicates over capitalization with low return. The co-efficient of variation is lower it shows consistency in the capital gearing ratio. 113

27 SIL The mean value of the capital gearing ratio is 2.56 and co-efficient of variation is percent. In the year the ratio shows high gearing, which implies trading on thin equity and in the year the ratio shows low gearing which represents trading on thick equity. It is observed from mean value, in the year and , the ratio shows low gearing that implies trading on thick equity and leads to less profit. The co-efficient of variation shows variability in the capital gearing ratio. TNECL The mean value of the capital gearing ratio is 3.24 and co-efficient of variation is 9.87 per cent. It is observed from mean value in the year the ratio shows high gearing which represents trading on thin equity and in the year , the ratio shows low gearing trading on thick equity. The co-efficient of variation is the lowest, it shows more consistency in the capital gearing ratio. To sum up, among the five steel industries the mean value is low and coefficient of variation is very high in AML. When compared with other companies the co-efficient of variation is the lowest in TNECL and it shows consistency in the capital gearing ratio. It represents thick equity with high return. 114

28 4.6 RETURN ON CAPITL EMPLOYED RATIO Return on capital employed establishes the relationship between profits and the capital employed. It is the primary ratio and is most widely used to measure the overall profitability and efficiency of a business. This ratio would provide sufficient insight into how efficiently the long-term funds of owners and creditors are being used. Higher the ratio, more efficient is the use of capital employed. The formula for calculating return on capital employed is ROCE = Operating Profit Capital Employed The term operating profit means Earnings before interest and Tax (EBIT). The term gross capital employed usually comprises of the total assets, fixed assets as well as current assets used in a business. The amount of employed is computed by using the formula Capital Employed = Net Fixed Assets + Working Capital The table 4.6 shows the return on capital employed among the select steel industries in Tamil Nadu. 115

29 TABLE 4.6 RETURN ON CAPTIAL EMPLOYED RATIO (Ratio in Times) YEAR AML BSIL KSIL SIL TNECL MEAN S.D C.V (in %) Source: Computed from the Annual Reports. AML It is be observed from the table 4.6 that, the mean value is 0.18 and Coefficient of variation is per cent. The ratio is higher value of 0.51 during the year because of heavy turnover, and the lower value of 0.06, in the year , which lead to the highest variation. The co-efficient of variation is higher which shows more variability in the return on capital employed ratio. 116

30 BSIL The above shows that mean value is 0.16 and Co-efficient of variation is per cent. It is observed that the return on capital employed ratio shows lower fluctuations during the study period. In the year , and it shows the higher ratio as 0.19 because of heavy turnover, whereas in the year is very low ratio as 0.05 the low profit is due to occurrence of high operating expenses than that of other periods. KSIL The mean value is 0.14 and co-efficient of variation is per cent. It is observed that the return on capital employed ratio shows normal difference during the study period. In the year and it shows the higher ratio as 0.24 because of heavy turnover, whereas, in the year is very low ratio that is 0.06, the reason for the low profit due to occurrence of high operating expenses than that of other periods. The co-efficient of variation shows less variation in the return on capital employed. SIL It is observed that the return on capital employed, varied between the highest value of 0.24 during and the lowest value of 0.13 in the year and The Co-efficient of variation is percent, which shows normal disparity similar to BSIL. 117

31 TNECL It is evident from above table that the return on capital employed ratio mean value is 0.25 and co-efficient of variation is 116 percent. It is observed that the return on capital employed ratio is lower than the mean value in the entire period of the study except in the year The co-efficient of variation shows more variability. It is concluded that the consistency is found from BSIL and SIL among the five industries followed by KSIL. The mean value of TNECL is the highest among the industries. Similarly the co-efficient of variation of TNECL also the highest. 118

32 ENDNOTES 1. Maheshwari, S.N, (1997), Financial Management, Sultan Chand and Sons, New Delhi, p Lawrence D. Schall and Charles W. Haley (1983), Introduction to Financial Management ( 3 rd Edition) Tata Mc Graw Hill, New Delhi, p Kuchal, S.C. (1977), Financial Management, An Analytical and Conceptual Approach, Himalaya Publishing House, Mumbai, p Kulkarni, P.V. (1983), Financial Management, Himalaya Publishing House, Bombay, P Phillips, D. Francis ( 1980), The Foundations of Financial Management, ( First Indian Edition), Arnold Heinemann, p Bierman H. Jr. (1965), Financial Accounting Theory, the Macmillan Company, New York, p Kuchal, S.C., Op.cit., P.30. p Earnest W. Walker ( 1976), Essentials of Financial Management, ( 2 nd edition), Prentice Hall, New Delhi, p George C. Phillippatos ( 1974 ), Essentials of Financial Management: Text and Cases, Holden Day Inc., p Clifton Kreps, H. Richard F, W, Waucht ( 1975 ), Financial Administration, The Dryden Press, Hinsdale, Ilions, p Maheshwari, S.N., Principles of Management Accounting, Sultan Chand Sons, (Sixteenth Revised Edition) New Delhi, p Maheshwari, S.N., Principles of Management Accounting Sixteenth Revised Edition 2006, Sultan Chand and sons, p.50.